Can I Get Life Insurance on My Brother?

Life insurance policies offer a financial safety net for dependents and can address various financial obligations. While most people obtain policies on their own lives, it is also possible to secure coverage for another individual, such as a sibling. This process involves specific requirements and steps to ensure the policy is legally sound. Understanding these conditions is crucial for anyone considering this type of financial planning.

Understanding Insurable Interest

A fundamental requirement for obtaining a life insurance policy on another person is demonstrating an “insurable interest.” This concept ensures the policyholder would experience a financial or emotional loss if the insured individual were to pass away, preventing speculative policies. Insurable interest must exist at the time the policy is purchased. For siblings, insurable interest is often presumed due to the close familial relationship.

Beyond the general familial tie, specific financial scenarios can clearly establish insurable interest between siblings. If siblings share financial obligations, such as a co-signed loan or a joint mortgage, the death of one sibling would directly impact the financial well-being of the other. A business partnership where one sibling’s death would cause financial harm to the other, or situations involving financial dependency where one sibling significantly supports the other, also demonstrate insurable interest. Some situations, such as a sibling acting as a legal guardian for the insured’s children, can also create an insurable interest.

The Requirement of Consent

Even when a clear insurable interest exists, obtaining the consent of the person being insured is a mandatory requirement for a life insurance policy. This rule protects individual privacy, prevents fraudulent activities, and upholds legal integrity. An individual cannot be insured without their knowledge or explicit permission.

Consent is formalized through the insured person’s signature on the application documents. They may also be required to participate in a phone interview with the insurer or undergo a medical examination as part of the underwriting process. These steps verify their identity and confirm their willingness to be insured.

Information Needed for the Application

To complete a life insurance application for a sibling, specific information is required from both the proposed policy owner and the proposed insured. For the proposed insured, essential details include their full legal name, date of birth, and Social Security Number. Insurers also require comprehensive medical history, including past diagnoses, current medications, doctor’s contact information, and details about any surgeries or hospitalizations. Information regarding lifestyle habits, such as smoking, alcohol use, and hobbies, along with their occupation, is also necessary.

For the proposed policy owner, the application will request your full name, date of birth, Social Security Number, and contact information. Financial information, such as income details, may also be requested to demonstrate your ability to pay the premiums and, if relevant, to support the claim of insurable interest. This collected data allows the insurance company to assess the risk associated with issuing the policy.

The Application and Underwriting Process

After all necessary information has been gathered and the insured sibling’s consent obtained, the application progresses to the submission phase. This involves submitting the completed forms and supporting documentation through an insurance agent or an online portal. Following submission, the application enters the underwriting process, where the insurance company evaluates the risk of insuring the individual.

During underwriting, the insurer reviews the medical records, financial information, and other provided details. A medical exam may be required for the insured sibling, depending on the policy amount and their health profile. This phase can take anywhere from a few days to several weeks, depending on the complexity of the case and the thoroughness of the information provided. Upon completion of underwriting, the insurer makes a decision, which could be approval at the quoted rate, approval with a higher premium, or denial. If approved, the policy is issued, premium payments begin, and the policy owner designates a beneficiary, who will receive the death benefit.